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New Forms for Reporting 2011 Taxes


The IRS is implementing several key changes for 2011 that will have a big impact on how active traders and investors report gains and losses moving forward.

Currently we talk about Schedule D, where capital gains and losses are reported; and the Schedule D-1 attachment form used for additional transaction history that does not fit on Schedule D. Starting with 2011 the D-1 form is non-existent, instead, everyone filing the new 2011 Schedule D with trading/investment activity will also have to file at least one Form 8949 – Sales and Other Dispositions of Capital Assets. Some people may have to file three versions of this form. The various totals from Form 8949 will flow into the Schedule D form somewhat like the old D-1 form.

Why the new form? This is all related to the new cost basis reporting requirements for brokers. The new Form 8949 will help the IRS to better compare your reporting with broker reporting on the 1099-B, to make sure you are accounting for all of your transactions – and paying all your taxes! If you have not read up on the reasons why brokers must report this new information, you will want to do that because it is all about making sure you file accurate taxes.

The IRS has finalized the forms for 2011 and posted instructions (see links below). The TradeLog development team will release major updates to TradeLog which will provide active traders and investors with the tools needed to comply with this new reporting! The upgrade will be free for all active subscribers of TradeLog software at the time of release.

Initial review of the NEW Form 8949

We have reviewed the new Form 8949 and here are a few key points that make this form different from past Schedule D and D-1 forms…

  • As already mentioned, Form 8949 must be included with Schedule D for reporting investment activity. The Schedule D is simply a summary of all capital gains transactions.

  • Each transaction will fall into one of three categories: (1) transactions which have cost basis reported on Form 1099-B, (2) transactions that do not have cost basis reported on Form 1099-B, (3) transactions not reported on 1099-B. A separate Form 8949 will be required for each category.

  • A new column has been provided, column (b) Code – the codes will be used for indicating if the transaction is a wash sale, section 1202 gains, or if the broker reported cost basis is incorrect, and should correspond with an adjustment in column (g).

  • A new column has also been added, column (g) Adjustments to gain or loss – this column will report if there is an adjustment to the transaction because of the wash sale rule, incorrect cost basis, or other tax rule adjustment.

  • Individual gain/loss is not calculated on this form, rather it is calculated on the new Schedule D form using the totals of sales, basis, and the new adjustments column.

  • Part one of the new form is for Short Term Gains and Losses, part two is for Long Term Gains and Losses

    • As you can probably gather, tax reporting did not get any easier for traders and investors! In fact, experts agree that now more than ever it is critical that traders and investors keep accurate records of their trade history so that they can fully comply with this new reporting. And don’t forget, although your broker is now required to track and report some cost basis information – they are NOT required to report all of the information that you are! And if you have more than one brokerage account you must adjust wash sales between ALL accounts before reporting to the IRS.

    TradeLog software has been helping traders accurately file Schedule D and other tax reporting for over 10 years. Did you know that of the tens of thousands of Schedule D reports TradeLog has generated for active traders we have never had the IRS reject one! You can be sure that we will continue to meet the challenge of reporting trader taxes accurately in the years to come! And as always, we provide the most comprehensive software support of any trader tax software!

    Additional Resources:

    Learn why TradeLog Software is the number one Schedule D solution of leading tax experts

    Download a copy of the new Schedule D for 2011

    Download a copy of the new IRS Form 8949 for 2011

    Read About.com Tax Planning article by William Perez

    • Pingback: New 2011 Schedule D and Form 8949 for Traders and Investors

    • Pingback: Be Educated on Trader Taxes

    • Weightmark

      Could not get the above links to work

      • Anonymous

        Fixed, they work now!

    • Anonymous

      Useful quick review of the new tax form 8949 for the 2011 tax year and beyond. I do wonder why the IRS did not just try to expand Schedule D or add an appendix to it, instead of creating a new form. Perhaps a separate new form helps the IRS computers match up the information with the revised 1099-B!

      In some stock sale situations the reporting is even more complex and confusing, such as for stock compensation where the cost basis is not complete. Look in the Tax Center (see http://bit.ly/9rI8R1) on http://www.myStockOptions.com for an article on this and what to do. Article is: The New IRS Form 1099-B For Reporting Sales Of Company Stock: What You Must Know To Avoid Paying Too Much Tax.

    • Cmnicolaou1

      Will look forward to the new form before ending 2011 year.

      Thank you

    • Pingback: TradeLog 8.6 Coming Soon

    • Dave Folsom

      When I clicked on “Download a draft copy of the new IRS Form 8949 for 2011″ appearing above, I get a copy of the new Schedule D for 2011. You might want to check out this apparent duplication.

    • Alex sullivan

      POS won’t download.…..

    • Fredcrowley

      As of 3/8/2012 Tradelog still cannot properly support the 8949 forms for 2011, and of course cannot provide the capability to reconcile a trader’s 1099-B reports. 

      • tradelog

        Actually we do generate Form 8949 in TradeLog 9 however we have marked as Draft until we are ready to release for filing. Currently around 36% of traders still do not have 1099-B and the CPA industry is reporting major problems coming in from broker 1099-B reports that are inaccurate. TradeLog 9.1 is currently in release to select users of TradeLog and to CPA advisors for review and testing before final release. No other software program has released a Form 8949 which reconciles with 1099-B.

        • equimetrics

          Just to be clear, are you saying that TradeLog 9 *will* generate Form 8949 automatically (and can handle an unlimited number of trades)? Your website seems to indicate that’s the case, but it’s a little bit ambiguous. I’m just wondering why Fredcrowley is saying TradeLog cannot handle Form 8949.

          • tradelog

            Yes, TradeLog version 9 currently generates this form. However we have admonished users not to file their taxes yet as trader taxes are a BIG problem this year. Broker 1099-B reports that have been released (some will not be issuing 1099-B until as late as April 15th now) are seriously flawed. In fact trader tax firms like GreenTraderTax will not even file Form 8949 returns currently because of the concern about the serious problems and repercussions it may have on audit risks. We are finishing TradeLog 9.1 which will contain new increased reconciliation to account for most Broker 1099-B reports so that our users can file Form 8949 with confidence.

          • Fredcrowley

             While Tradelog will generate an 8949 form, per their own words it cannot be used to file your taxes. So saying they produce the form but it can’t be used is a real spin on words. Neither does it allow a reconciliation between the 8949 form and the 1099-Bs. Granted Tradelog says that it will accomplish this at some point (originally stated as being Feb 15, then in this weeks webinar, that it would be available on Mar 6 which clearly wasn’t met). Yes the new tax reporting is complex, however per Tradelog 64% of the brokers have issued 1099-Bs.

            • tradelog

              Fred, you can use the information to file if you want, at your own risk. Also we will be happy to refund your purchase price if you do not want to use TradeLog. Any users who do not want to wait for an accurate solution are certainly entitled to a full refund and can file taxes manually. Please contact our support department about such requests. Thank you.

            • equimetrics

               Thank you Fredcrowley and tradelog for the clarifications.

            • tradelog

              Everyone. TradeLog 9.1 has been released today for all registered users. It includes the comprehensive 1099-B reconciliation and Form 8949 adjustment functions for 1040 Schedule D filing. Make sure and download and follow the instructions in the quick start guide!

    • Shinn

      After re-reading existing (maybe “old”) instruction, an MTM tax filers need not have to mess with Form 8949. Is this true?  Please comment.